Futures Holding In Positive Territory At Lunch, Results Of Rinban Operations Due

At the Tokyo lunch break, JGB futures are holding in positive territory, +10 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined BOJ Minutes for the July meeting. Of note, many members said hitting the BOJ’s inflation target was not yet in sight.
• Later today the calendar sees Leading and Coincident Indices, and Machine Orders.
• A record real yield differential between Japan and the US is pushing the yen toward 150 per dollar, underscoring the Asian nation’s loose monetary policy even after the central bank tweaked the yield-curve program. (See link)
• The cash JGB curve has twist-flattened, pivoting at the 3s, with yields 0.1bp higher to 1.0bp lower. The benchmark 10-year yield is 0.5bp lower at 0.736%, above BOJ's YCC soft limit of 0.50% but below its hard limit of 1.0%. It is also lower than the cycle high of 0.756%, set prior to the recent BOJ decision.
• Results of today’s BoJ Rinban operations covering 3- to 25-year+ JGBs are due at 03:55-04:00 BST.
• Swap rates are lower out to the 20-year and higher beyond. Swap spreads are mixed.